Volga Baikal AGRO NEWS Update on the Introduction of Export Duties in Russia !!!

From March 1, the export duty on wheat has been increased up to 50 euros per ton

Volga Baikal AGRO NEWS Update on the Introduction of Export Duties in Russia !!!

Grain exports fell after the introduction of the duty.

However, before the end of the season, a revival of the rate of shipments is still possible.

From March 01, the export duty on wheat has been increased up to 50 euros per ton, while from February 15 it was 25 euros / ton. In anticipation of the imposition of restrictions, exporters shipped grain at a record high rate. “In December-January, there was a sharp acceleration in export, in the second half of February, the rates began to decline,” – told  to Agroinvestor Andrey Sizov, director of the analytical center SovEkon.

According to the Russian Grain Union (RGU), from the beginning of July 2019 to February 15 last year, 27.7 million tons of grain were exported, including 24.8 million tons of wheat. During the same period of the current season, 37.3 million tons of grain were shipped, including 32.1 million tons of wheat. Thus, shipments for all grain increased by 34.5%, for wheat – by 30%, the director of the RGU analytics department cites data.Elena Tyurina. She adds that the daily grain shipments in February 2020 amounted to 78 thousand tons per day, including 67.7 thousand tons of wheat. This year, from February 01 to February 15, the indicator averaged 154 thousand tons of grain in general, including 147.5 thousand tons of wheat – that is, wheat shipments increased 2.2 times compared to the same period last year.

Chairman of the Board of the Union of Grain Exporters Eduard Zernin says that the rate of grain export is not falling yet and will not fall until June. “Exports are not spontaneous sales, they require planning ahead,” – he emphasizes. Zernin adds that the procedure for obtaining licenses and paying fees has been worked out, and there are no operational problems. In terms of prices, all exporters restructured their policies and incorporated duties into purchase prices. “In general, export prices have already decreased relative to export parity by the size of the duty, and in the South they are already close to reflecting the duty, which will be in effect from March,” comments Sizov. “Last week there was a slight increase in purchase prices and some revival of supplies from agricultural producers.”

The Union of Grain Exporters expects a serious drop in purchase prices from May, when grain will be purchased to fulfill June contracts. True, the volume of purchases will be small – two to three times lower than the traditional rates, Zernin said.

General Director of the analytical company ProZerno Vladimir Petrichenko notes that, according to the Federal Customs Service, from February 01 to February 14:  2.8 million tons of wheat were shipped to foreign markets, and from February 15 to 24: 300-400 thousand tons. “However, we believe that at the end of the month there will be an active execution of contracts, especially in the last days and hours of February. The registration of transactions for ships that are now at loading is proceeding at a powerful pace in order to be in time until March 1, when the duty will rise to 50 euros,” – the expert told to Agroinvestor. At the end of the last week, Petrichenko does not exclude that by the end of the second half of February, the export of wheat will amount to 0.6-1 million tons. “It is still difficult to say what will happen next, in March,” – he adds.

According to RGU data, from 15 to 24 February, about 1 million tons of wheat were sent abroad. “Daily shipments have decreased to about 110 thousand tons, but this is still more than in February 2020,” – Tyurina notes.

Sizov does not exclude that the export rate will continue to decline in the coming weeks. However, until the end of the season, despite the increase in the size of the duty since March 1, we can again see a revival in shipments, as the conclusion of new contracts continues. “Russian exporters are ready to more actively conclude deals, since the risks that they will not be able to fulfill their obligations have decreased – the market will be able to find the necessary volumes of grain for export contracts,” – the expert explains.

Meanwhile, the International Grains Council has lowered the forecast for grain exports from Russia this agricultural year by 1.1 million tons to 46.7 million tons. Previously, analysts have already reduced the forecast by 1 million tons to 47.8 million tons. At the same time, the potential for export of wheat it was not revised neither in January nor in February and is estimated at 38.9 million tons.

Source: Agroinvestor.ru

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